But Diller, who has served as chairman and CEO of Paramount, Fox and USA Networks in a career spanning nearly six decades, admires Katzenberg's hustle.
"Whatever happens, he's so naked out there with this," Diller said. "You know, he's just standing there waiting for the tide to either come towards him or leave him naked on the beach.
"This is hope, his great hope: that somewhere in [Quibi's library] there is going to be a giant hit. That in there is going to be something that makes people say, 'Oh, my God, I've got to see it.'"
(NBC News will produce daily newscasts for Quibi.)
In the wide-ranging hourlong discussion, Diller also touched on the Academy Awards ("They are either spot on or completely weird"), Mark Zuckerberg ("He's the opposite of evil") and Bernie Sanders' attacks on Mike Bloomberg's wealth ("What an idiot statement"). But the focus was the Hollywood streaming wars and the long-term prospects of companies like Apple and AT&T, which are still finding their footing in an area dominated by Netflix.
Diller argued that Apple TV+, which launched in November, "hasn't started yet."
Apple is "still not in it with both feet," he said of the iPhone maker's foray into Hollywood. "They've put some capital in, but relatively little. They're not making a major effort. ... They haven't decided yet."
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He also questioned the long-term viability of AT&T's HBO Max.
"I don't think they're going to go out of business," he said, "but HBO ... should have been out there from the beginning competing with Netflix. But the management at Time Warner said, 'Just give us the profits.' ... It wasn't much interested in what HBO's destiny could or should be.
"They basically gave it to Netflix," Diller added. "Now they're trying to reform HBO into being ... competitive with Netflix. I'm not saying it's impossible, but it's awfully hard to do."
Ultimately, Diller bet that all the incumbents would have a seat at the table going forward, including Netflix, Disney and Amazon Prime.
"How do you compete with a business model that says ... I can outspend you on programming, not because of its popularity, but because of how many subscriptions it drives to Prime?" Diller said of Amazon. "That's like, oh, my God."